July 28, 2010

Ms. Neera Chatterjee

Office of General Counsel

University of Texas System

201 West Seventh Street

Austin, Texas 78701-2902

OR2010-11335

Dear Ms. Chatterjee:

You ask whether certain information is subject to required public disclosure under the Public Information Act (the "Act"), chapter 552 of the Government Code. Your request was assigned ID# 388530 (OGC# 130487).

The University of Texas at Dallas (the "university") received a request for information pertaining to vendor proposals submitted in response to Request for Proposals 1001-001. Although you take no position with respect to the public availability of the submitted information, you indicate its release may implicate the proprietary interests of third parties. ⁽¹⁾ Accordingly, you provide documentation showing that you notified these companies of the request and of their right to submit arguments to this office as to why their proposals should not be released. See Gov't Code § 552.305(d); see also Open Records Decision No. 542 (1990) (determining statutory predecessor to section 552.305 permits governmental body to rely on interested third party to raise and explain the applicability of exception to disclose under Act in certain circumstances). We have received comments from Bao. We have considered the submitted arguments and reviewed the submitted information.

Initially, you acknowledge, and we agree, the university failed to meet the deadline prescribed by section 552.301(b) of the Government Code in requesting an open records decision from this office. See Gov't Code § 552.301(b). Pursuant to section 552.302 of the Government Code, a governmental body's failure to comply with the requirements of section 552.301 results in the legal presumption the requested information is public and must be released, unless the governmental body demonstrates a compelling reason to withhold the information from disclosure. See id. § 552.302; Simmons v. Kuzmich, 166 S.W.3d 342, 350 (Tex. App.--Fort Worth 2005, no pet.); Hancock v. State Bd. of Ins., 797 S.W.2d 379, 381-82 (Tex. App.--Austin 1990, no writ) (governmental body must make compelling demonstration to overcome presumption of openness pursuant to statutory predecessor to section 552.302); see also Open Records Decision No. 630 (1994). Generally, a compelling reason to withhold information exists where some other source of law makes the information confidential or where third party interests are at stake. Open Records Decision No. 150 at 2 (1977). Because third-party interests can provide a compelling reason for non-disclosure of information under section 552.302, we will consider the arguments submitted by Bao.

Next, we note an interested third party is allowed ten business days after the date of its receipt of a governmental body's notice under section 552.305(d) to submit its reasons, if any, as to why information relating to that party should be withheld from public disclosure. See Gov't Code § 552.305(d)(2)(B). As of the date of this letter, we have only received comments from Bao explaining why its information should not be released. Therefore, we have no basis to conclude any of the remaining notified companies have a protected proprietary interest in their information. See id. § 552.110; Open Records Decision Nos. 661 at 5-6 (1999) (to prevent disclosure of commercial or financial information, party must show by specific factual evidence, not conclusory or generalized allegations, that release of requested information would cause that party substantial competitive harm), 552 at 5 (1990) (party must establish prima facie case that information is trade secret), 542 at 3. Accordingly, the university may not withhold any of the submitted information on the basis of any proprietary interest these companies may have in this information.

Bao claims portions of its submitted information are protected under section 552.110 of the Government Code. Section 552.110 protects (1) trade secrets, and (2) commercial or financial information, the disclosure of which would cause substantial competitive harm to the person from whom the information was obtained. See Gov't Code § 552.110(a), (b).

Section 552.110(a) protects trade secrets obtained from a person and privileged or confidential by statute or judicial decision. Id. § 552.110(a). The Texas Supreme Court has adopted the definition of trade secret from section 757 of the Restatement of Torts. Hyde Corp. v. Huffines, 314 S.W.2d 763 (Tex. 1957); see also Open Records Decision No. 552 at 2 (1990). Section 757 provides that a trade secret is:

any formula, pattern, device or compilation of information which is used in one's business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it. It may be a formula for a chemical compound, a process of manufacturing, treating or preserving materials, a pattern for a machine or other device, or a list of customers. It differs from other secret information in a business . . . in that it is not simply information as to single or ephemeral events in the conduct of the business . . . . A trade secret is a process or device for continuous use in the operation of the business. . . . [It may] relate to the sale of goods or to other operations in the business, such as a code for determining discounts, rebates or other concessions in a price list or catalogue, or a list of specialized customers, or a method of bookkeeping or other office management.

Restatement of Torts § 757 cmt. b (1939); see also Huffines, 314 S.W.2d at 776. In determining whether particular information constitutes a trade secret, this office considers the Restatement's definition of trade secret as well as the Restatement's list of six trade secret factors. ⁽²⁾ Restatement of Torts § 757 cmt. b (1939). This office must accept a claim that information subject to the Act is excepted as a trade secret if a prima facie case for the exception is made and no argument is submitted that rebuts the claim as a matter of law. See ORD 552 at 5. However, we cannot conclude that section 552.110(a) is applicable unless it has been shown that the information meets the definition of a trade secret and the necessary factors have been demonstrated to establish a trade secret claim. Open Records Decision No. 402 (1983).

Section 552.110(b) protects "[c]ommercial or financial information for which it is demonstrated based on specific factual evidence that disclosure would cause substantial competitive harm to the person from whom the information was obtained[.]" Gov't Code § 552.110(b). This exception to disclosure requires a specific factual or evidentiary showing, not conclusory or generalized allegations, that substantial competitive injury would likely result from release of the information at issue. Id.; see also ORD 661 at 5-6 (business enterprise must show by specific factual evidence that release of information would cause it substantial competitive harm).

Bao asserts that portions of its information constitute trade secrets that are excepted from disclosure under section 552.110(a). Upon review, we find Bao has failed to demonstrate how its information meets the definition of a trade secret, nor has Bao demonstrated the necessary factors to establish a trade secret claim for this information. See ORD 402 (section 552.110(a) does not apply unless information meets definition of trade secret and necessary factors have been demonstrated to establish trade secret claim), 319 at 3 (information relating to organization and personnel, market studies, qualifications and experience, and pricing are not ordinarily excepted from disclosure under statutory predecessor to section 552.110). We note that pricing information pertaining to a particular proposal or contract is generally not a trade secret because it is "simply information as to single or ephemeral events in the conduct of the business," rather than "a process or device for continuous use in the operation of the business." See Restatement of Torts § 757 cmt. b (1939); Huffines, 314 S.W.2d at 776; ORDs 319 at 3, 306 at 3. Consequently, the university may not withhold the information at issue under section 552.110(a).

Bao also asserts that portions of its information are excepted from disclosure under section 552.110(b). Upon review, we conclude Bao has established the release of its pricing information would cause it substantial competitive injury; therefore, the university must withhold this information, which we have marked, under section 552.110(b). However, we find Bao has made conclusory or generalized allegations or failed to provide specific factual evidence demonstrating that release of any of the remaining submitted information would result in substantial competitive harm to its interests. See ORDs 661 (for information to be withheld under commercial or financial information prong of section 552.110, business must show by specific factual evidence that substantial competitive injury would result from release of particular information at issue), 319 at 3. Accordingly, we determine that no portion of the remaining information is excepted from disclosure under section 552.110(b) of the Government Code.

We note that some of the remaining information appears to be protected by copyright. A custodian of public records must comply with the copyright law and is not required to furnish copies of records that are copyrighted. Open Records Decision No. 180 at 3 (1978). A governmental body must allow inspection of copyrighted materials unless an exception applies to the information. Id.; see Open Records Decision No. 109 (1975). If a member of the public wishes to make copies of copyrighted materials, the person must do so unassisted by the governmental body. In making copies, the member of the public assumes the duty of compliance with the copyright law and the risk of a copyright infringement suit.

In summary, the university must withhold the information we have marked under section 552.110(b) of the Government Code. As no further exceptions to disclosure are raised, the remaining information must be released, but any information protected by copyright must be released in accordance with copyright law. ⁽³⁾

This letter ruling is limited to the particular information at issue in this request and limited to the facts as presented to us; therefore, this ruling must not be relied upon as a previous determination regarding any other information or any other circumstances.

This ruling triggers important deadlines regarding the rights and responsibilities of the governmental body and of the requestor. For more information concerning those rights and responsibilities, please visit our website at http://www.oag.state.tx.us/open/index_orl.php, or call the Office of the Attorney General's Open Government Hotline, toll free, at (877) 673-6839. Questions concerning the allowable charges for providing public information under the Act must be directed to the Cost Rules Administrator of the Office of the Attorney General, toll free, at (888) 672-6787.

Sincerely,

Christina Alvarado

Assistant Attorney General

Open Records Division

CA/dls

Ref: ID# 388530

Enc. Submitted documents

c: Requestor

(w/o enclosures)

Mr. Anand Rajaram

Hydus, Inc.

9720 Beechnut, Suite 116

Houston, Texas 77036

(w/o enclosures)

Ms. Shanta Santaprakash

Systems Technology Group, Inc.

3155 West Big Beaver Road, Suite 220

Troy, Michigan 48084

(w/o enclosures)

Mr. Fraser Ashworth

Sogeti USA, L.L.C.

222 West Las Colinas Boulevard, Suite 960

Irving, Texas 75039

(w/o enclosures)

Ms. Leigh Gibson

Romexsoft USA, Inc.

8200 Galley Street

Frisco, Texas 75035

(w/o enclosures)

Mr. John Player

Smartbridge, L.L.C.

4800 Sugar Grove Boulevard, Suite 603

Stafford, Texas 77477

(w/o enclosures)

Dr. Mazhar Islamraja

Mach B

1200 West Walnut Hill Lane, Suite 3200

Irving, Texas 75038

(w/o enclosures)

Gita Lal

Daman Consulting, Inc.

Building 3, Suite 395

1250 South Capital of Texas Highway

West Lake Hills, Texas 78746

(w/o enclosures)

Preel Kumat

Cityon Systems, Inc.

2000 North Central Expressway, Suite 115

Plano, Texas 75074

(w/o enclosures)

Ms. Holly Manzano

BIS Consulting, Inc.

2077 Gold Street, Suite 285

Alviso, California 95002

(w/o enclosures)

ZSL, Inc.

85 Lincoln Highway

Edison, New Jersey 08820

(w/o enclosures)

Mr. Balwinder Dhillon

Amer Technology, Inc.

5717 Northwest Parkway, Suite 103

San Antonio, Texas 78216

(w/o enclosures)

Mr. Jim Bao

Bao & Associates

4408 Foxtail Lane

Plano, Texas 75024

(w/o enclosures)

Footnotes

1. The third parties are: Hydus, Inc.; Systems Technology Group, Inc.; Sogeti U.S.A., L.L.C.; Romexsoft U.S.A., Inc.; Smartbridge, L.L.C.; Mach B; Daman Consulting Group, Inc.; Cityon Systems, Inc.; BIS Consulting, Inc.; ZSL, Inc.; Amer Technology, Inc.; and Bao & Associates ("Bao").

2. The Restatement of Torts lists the following six factors as indicia of whether information constitutes a trade secret:

(1) the extent to which the information is known outside of [the company];

(2) the extent to which it is known by employees and other involved in [the company's] business;

(3) the extent of measures taken by [the company] to guard the secrecy of the information;

(4) the value of the information to [the company] and [its] competitors;

(5) the amount of effort or money expended by [the company] in developing the information;

(6) the ease or difficulty with which the information could be properly acquired or duplicated by others.

Restatement of Torts § 757 cmt. b (1939); see also Open Records Decision Nos. 319 at 2 (1982), 306 at 2 (1982), 255 at 2 (1980).

3. We note that although Bao raises section 552.131 of the Government Code, it makes no arguments to support this exception. Therefore, we assume Bao has withdrawn its claim under this section.

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